Pennsylvania Governor Proposes Cigar Tax, Again

Pennsylvania Gov. Ed Rendell, for the second time in as many years, is proposing a first-ever tax on premium handmade cigars for the Keystone State.

Included in Rendell's $29 billion budget for the 2010-11 fiscal year is a 30 percent levy on cigars and Other Tobacco Products (OTP) like smoking tobacco and smokeless tobacco.

Pennsylvania is one of only two states that does not tax cigars, with Florida being the other. The Keystone State, though, is the only state in the country that does not tax OTP.

The lax tobacco tax laws mean some of the nation's major cigar distributors, Cigars International, Holt's Cigar Co., and the Tinder Box, call the state home.

"We are going to fight [the tax proposal]," said Robert Levin, president and chief executive officer of Holt's Cigar Co, located in Philadelphia. "We have a good shot at defeating it. There are a lot of Republican senators who oppose any cigar tax."